Tanzania Breweries Limited Reports Increased Profits

May 26, 2011

Profits from Tanzania Breweries Limited (TBL) have increased dramatically over the last year from TZS 92.4 billion to TZS 121.7 billion, which represents an overall increase of 32 percent.

According to a statement that was issued by Robin Goetzsche, the TBL Managing Director, sales revenues from last year were increased by 20 percent as a direct result of an increase in volume, an improved product mix and increases in the inflationary prices.

The statement indicated that the TBL was able to pay a total of TZS 51.5 billion to the government in income tax as a result of the significant profit that they posted; this amount represents an increase in the TZS 41.4 billion that was paid in income taxes during the previous period

Mr. Goetzsche went on to explain that these results reflect an encouraging improvement from the previous year particularly because it comes at a time when the competitiveness of the market is continuingly increasing.

TBL is currently one of the companies that is listed at the Dar es Salaam Stock Exchange (DSE) and its shares continue to exhibit positive and promising performances, with prices recently closing at TZS 1,820.

According to Moremi Marwa, a representative of the Tanzania Securities Limited (TSI), the financial statement for the TBL would impact the trade of its shares on the stock market.

“Definitely, this being a dividend driven market especially for retail investors there will be a positive reaction,” said Mr. Marwa, “We expect to see a sustainable price of around TZS 1,800 or above, but with a downward risk.”

However, according to reports, this may not pose a large issue for long term investors and institutions because shareholders in the company are abandoning their current returns for better dividends and capital appreciation in the future.

According to the statement that was released by the TBL, a decision was made to delay the declaration of the most recent dividend until the company’s net debt situation is made public following a significant capital expenditure from funding the Mbeya based brewery.

TBL is currently one of the top three operations for the world’s second top beer maker based on volume, SABMiller.

“The company employs about 1,400 people and is represented across the country with four clear beer breweries, a distillery, a malting facility and seven distribution depots,” said Mr. Goetzsche.

According to Stephen Kilindo, the TBL Human Resources and Communications director, TBL is one of the highest contributors to the to the South Africa-based SABMiller in terms of beer volumes and profits.